Google recently commissioned a study to explore how brands and agencies can work together to accelerate growth in the year ahead. Christos Nikitopoulos, Head of Agency at Google Canada, shares his thoughts on the findings and implications for the industry.
In 2020, brands were forced to manage through a volatile and uncertain marketplace. The shift into crisis mode enabled both brands and agencies to adopt an agile and transformative shift in strategy, leading to redefined and stronger relationships.
The marketing and consumer landscape continues to change and for many, working closely with agencies has become even more important. Agencies are playing an increasingly important role in helping brands navigate uncertainty, simplifying complex ecosystems, creating operational value at scale, and accelerating digital transformation. This is especially important as advertisers address the changing privacy landscape.
To explore this evolving dynamic, Google commissioned Forrester Consulting on a new study with over 500 Canadian brand and agency decision makers. The study shows that in 2021, strong brand-agency partnerships will continue to be critical to driving growth and navigating uncertainties. Here are three key ways brands and agencies can become exceptional strategic partners in 2021 and beyond.
Automation is transforming agencies
Brands are increasingly looking for agencies to inform their automation strategy and vision, yet only 1 in 3 have connected automation to growing revenue.1 This year, agencies can embrace opportunities to become leaders in this space.
The path to purchase has changed, particularly in the last year with the rise of e-commerce, and marketers and agencies need to be able to respond to consumer demand in real-time. Automation allows agencies to optimize campaigns, improve performance and re-focus their time and resources to focus on high-value work.
“In order to support our client’s growth in e-commerce, we at GroupM view merging retail and media data and expertise as absolutely critical and thus are hiring, partnering, and building the technology to win in this new environment,” said Adrian Martin, Head of Ecommerce Media, GroupM.
Brands and agencies should develop automation strategies together, to stay ahead of trends, keep agile and test and learn.
Automation is about finding new ways to grow. Brands and agencies should develop automation strategies together, to stay ahead of trends, keep agile and test and learn using data.
“With more information at the fingertips of consumers than ever before, brands are seeking strategies to adapt with speed and relevance,” said Jeff Greenspoon, CEO of dentsu Canada. “Marketing decision makers are looking to transform their business for the long-term with an increased reliance on technology to automate process. Experiences we deliver must be connected, contextual and personalized. Balancing the adoption of advanced technologies with human interaction will future-proof our agency model by unlocking the right mix of messaging, tools and technologies that enhance the customer journey and accelerate positive business impact for our clients.”
Brands are looking to agencies for new digital services
Brands need more support from agencies more than ever, especially as advertisers navigate new privacy guidelines. The study found that for creative services and content production alone, brands expect to increase agency work by 39% in the next three years.2 And with consumer needs and behaviour evolving rapidly, and the explosion in e-commerce and online shopping, agencies should evolve their offerings, too. Agencies should continue to offer strong, reliable services but think of new ways to adapt their services, to meet new needs.
"We have seen the need for both e-commerce and data strategy solutions accelerate greatly in the past year and continue to address this demand by building our capabilities through Reprise & Kinesso respectively,” said Graham Moysey, CEO of IPG Mediabrands Canada. “As consultants as well as executors, we are focused on providing recommendations to our clients which are both strategically sound and operationally feasible so that we can help our clients achieve what they ultimately want — business results."
Increase creative resources, but also invest in new ways to streamline, curate and measure.
Nearly half of the brands surveyed said they find it challenging to effectively use customer data3; 34% find it challenging to make their insights actionable,4 and 42% say their inability to measure ROI from marketing initiatives is a top challenge.5
The deprecation of third-party cookies and shifts in consumer privacy regulations has led nearly half of brands to reduce their dependence on technologies that use third-party data,6 and they’re eager for new ideas to deliver personalization at scale. “Across our industry, we have seen data permeate into every aspect of the media buying process. However, as the Forrester study suggests, it is imperative that we use data to its maximum potential, which is often a challenge,” said Axel Dumont, president of Cossette Media Canada. “To do so, agencies and their clients must foster relationships between data-centric partners — much like we have at Cossette Media. Ultimately, using new technology to create a stronger connection between data and strategy, while ensuring the former informs the latter.”
Agencies have an opportunity to use first-party data to give their brands a competitive advantage through a single view of the customer, actionable insights and ultimately, a better customer experience.
Brands and agencies are redefining deliverables
Brands and agencies are revisiting compensation models, from how they pay for people to platforms and performance. The shift towards a focus on driving business outcomes has sharpened the focus on the most important business problems, with shared ownership and more tightly aligned objectives.
Another recent Forrester Consulting study showed that 51% of brand decision makers in EMEA will prioritize and select future agencies with a track record of helping clients achieve growth, compared to 33% before the pandemic.7
“The media agency relationship in particular has evolved through the pandemic,” said Alastair Taylor, CEO of Publicis Media Canada. “Media investment represents either the second or third biggest line item on any CEO’s balance sheet and the economic uncertainty has effectively raised us further up the food chain, facilitating much deeper and more meaningful commercial relationships. This has led us to adopt fee relief for clients, shared KPIs and risk, remuneration based on business performance, and ultimately a much deeper partnership.”
Both brands and agencies anticipate the industry will move away from retainer and project based compensation models over the next three years, and toward licensing- and performance-based options.8 Brands and agencies should embrace this opportunity to work together to create new, nontraditional and outcome-based compensation models that work for both sides, and can help ensure long-term sustainability.
Embrace this opportunity to work together to create new, nontraditional and outcome-based compensation models that work for both sides.
Brands need strategic agency partners now more than ever. While agencies meet new digital realities by upskilling talent and investing in technology, brands can help fuel growth by sharing first-party data and involving them in strategic conversations early. This will help them be ready, together, for whatever 2021 has in store.
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